Energy giant SSE forecasts profits of £1.5bn TWO MONTHS after hiking prices but 250k customers vote with their feet and leave

Energy giant SSE said it was on course to post profits of £1.54billion this year and increase payouts to shareholders, two months after it announced a sharp hike in customer tariffs.

The news will doubtless enrage customers following the 8.2 per cent average rise in energy bills announced by SSE in November.

The profits forecast comes despite the energy giant losing 250,000 gas and electricity customers - with accounts in Britain and Ireland falling from 9.47 million to 9.22 million - while average consumption of electricity and gas in Britain fell by 4.3 per cent and 9.5 per cent respectively in the nine months to the end of December last year compared with 2012.

Profits boost: Big six energy giant SSE said profits would be up around 8 per cent this year following an 8 per cent hike in energy tariffs two months ago

One of the ‘Big Six’ energy firms, SSE blamed Government green levies as well as rising network costs and wholesale energy prices for the inflation busting increase.

SSE was the first to announce price hikes soon after Labour leader Ed Miliband promised his party would impose a 15 month freeze on household gas and electricity bills if it won next year’s general election, as household incomes continue to be squeezed.

SSE said it will cut bills for its 9million customers by 3.5 per cent from March 24 following the Government's green levy shake-up but it still means an overall above-inflation rise for hard-pressed households. It also said it would freeze prices for at least a year from March.

It said its full-year dividend would be
up by 3 per cent and its adjusted profit before tax for the year ending
on March 31 was likely to rise in line with market expectations to
£1.54billion - an increase of 8.8 per cent on the previous year.

The energy firm's chief executive Alistair Phillips-Davies said that despite the ‘difficult business environment’, it was encouraging that the group was on course to deliver more profits and cash for shareholders.

SSE said there was uncertainty over the future of its investment programme, with the prospects for new power generation assets in Britain ’not encouraging’. It has argued it needs to make even money to fund such projects.

The group said the failure of two offshore wind farm projects it had a stake in to be chosen for a Government investment short-list was disappointing and that it was reviewing its offshore portfolio.

This has added to uncertainty about its investment programme in the five years from 2015, which SSE said was likely to be lower than the £1.5billion - £1.7billion range it has invested annually since 2010.

The group's statement also addressed the question of Scottish independence, saying that while it did not have a view on the matter, it reiterated that the uncertainty over the future ‘increased legislative and regulatory risk’.

Meanwhile, the company said it restored electricity supplies to 130,000 homes following storms and flooding before Christmas.

Mr Phillips-Davies said: ‘Despite what is clearly a difficult business environment, the overall performance of the company has been solid in 2013/14 and the efforts of employees, shown recently in the response to the Christmas week storms, have been excellent.

The energy firm's boss also said the Government's decision last month to remove some of the costs of its green policies from energy bills was ‘an important step in the right direction’.

But he added that more needed to be done ‘to shift the full cost burden of environmental and social policies from the energy bill to the taxpayer’.

SSE said a shake-up at the top of the company hierarchy will see its management board replaced by a slimmed-down six-strong executive committee.

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Energy giant SSE forecasts profits of £1.5bn TWO MONTHS after hiking prices but 250k customers vote with their feet and leave